Avoiding discounts can ensure healthy future for Scotch
Resisting discounts and pushing gift packs will bring the Scotch category back into growth in the UK, according to a leading supplier.
Blended Scotch is down 4% and single malt 2% in volume in the UK off-trade (Nielsen, year to July 19).
Glenfiddich supplier William Grant said it took a decision to accept volume losses in a bid to shun discounts and is happy with progress so far.
Andrew Clifton, head of off-trade, said: “A year ago we took the decision to focus Glenfiddich more on a premium position and a gifting strategy, rather than promoting at key times of the year. That has helped retailers gain value but it has caused us volume decline.
“One of the challenges we face is that malt whisky is relatively thin on the ground in terms of liquid. The youngest statement we have is a 12 Year Old. We have to forecast 12 years ahead. It’s a very precious liquid.
“Over the past few years it was being used as a loss leader and sold at a very low price point. That doesn’t help anyone at all.”
Exports of Scotch were down 11% in the first half of 2014 (SWA) with economic uncertainties blamed. This has prompted Diageo to delay plans to expand its production facilities.
But Pernod Ricard recently opened a new distillery and Clifton said William Grant is also committed.
“We are definitely not slowing down production and we will be supportive to this category for decades to come,” he said.